Revenue Recognition

12 Months Ended

Dec. 31, 2020

Revenue Recognition [Abstract]

Revenue Recognition

(4) Revenue Recognition:

Effective January 1, 2018, we adopted ASU 2014-09, “Revenue from Contracts with Customers,” (ASC 606).

We categorize our products, services and other revenues into the following categories:

Data and Internet services include broadband services for residential and business customers. We provide data transmission services to high volume business customers and other carriers with dedicated high capacity circuits (nonswitched access) including services to wireless providers (wireless backhaul);

Voice services include traditional local and long-distance wireline services, Voice over Internet Protocol (VoIP) services, as well as a number of unified messaging services offered to our residential and business customers. Voice services also include the long-distance voice origination and termination services that we provide to our business customers and other carriers;

Video services include revenues generated from services provided directly to residential customers as terrestrial television services, and through Dish satellite TV services;

Other customer revenue includes switched access revenue, sales of customer premise equipment to our business customers, rents collected for collocation services, and revenue from other services and fees. Switched access revenue includes revenues derived from allowing other carriers to use our network to originate and/or terminate their local and long-distance voice traffic (switched access). These services are primarily billed on a minutes-of-use basis applying tariffed rates filed with the FCC or state agencies; and

Subsidy and other regulatory revenue includes revenues generated from cost subsidies from state and federal authorities, including the Connect America Fund Phase II.

The following tables provide a summary of revenues, by category. Revenues in the following tables include revenues for the Northwest Operations for the four months ended April 30, 2020 (prior to its disposal):

	For the year ended December 31,
($ in millions)	2020		2019		2018
Data and Internet services	$	3,478	$	3,756	$	3,878
Voice services		2,085		2,500		2,721
Video services		789		1,005		1,085
Other		429		477		544
Revenue from contracts
with customers (1)		6,781		7,738		8,228
Subsidy and other regulatory revenue (2)		374		369		383
Total revenue	$	7,155	$	8,107	$	8,611
	For the year ended December 31,
($ in millions)	2020		2019		2018
Consumer	$	3,586	$	4,153	$	4,380
Commercial		3,195		3,585		3,848
Revenue from contracts
with customers (1)		6,781		7,738		8,228
Subsidy and other regulatory revenue (2)		374		369		383
Total revenue	$	7,155	$	8,107	$	8,611

⁽¹⁾Includes $67 million, $70 million, and $73 million of lease revenue for the years ended December 31, 2020, 2019, and 2018 respectively.

⁽²⁾Includes $30 million in transition services provided to the purchaser in connection with the divestiture of the Northwest Operations for the year ended December 31, 2020.

Frontier satisfies its obligations to customers by transferring goods and services in exchange for consideration received from the customer. The timing of Frontier’s satisfaction of the performance obligation often differs from the timing of the customer’s payment, which results in the recognition of a contract asset or a contract liability. Frontier recognizes a contract asset or liability when the Company transfers goods or services to a customer and bills an amount which differs from the revenue allocated to the related performance obligations.

The following is a summary of the changes in the assets established for our costs to acquire customers for the years ended December 31, 2020 and 2019:

	Contract Acquisition Costs
($ in millions)	Current		Noncurrent
Balance at January 1, 2019	$	107	$	127
Commissions deferred		138		6
Commission costs recognized		(131)		-
Reclass to assets held for sale		(9)		(12)
Balance at December 31, 2019		105		121
Commissions deferred		94		13
Commission costs recognized		(116)		(4)
Reclassified between Current and Noncurrent		14		(14)
Balance at December 31, 2020	$	97	$	116

The following is a summary of the changes in the contract assets and contract liabilities for the years ended December 31, 2020 and 2019:

	Contract Assets				Contract Liabilities
($ in millions)	Current		Noncurrent		Current		Noncurrent
Balance at January 1, 2020	$	37	$	8	$	41	$	21
Revenue recognized included
in opening contract balance		(34)		-		(68)		(12)
Cash received, excluding amounts
recognized as revenue		-		-		85		11
Credits granted, excluding amounts
recognized as revenue		3		1		-		-
Reclassified between Current
and Noncurrent		-		-		-		-
Balance at December 31, 2020	$	6	$	9	$	58	$	20
	Contract Assets				Contract Liabilities
($ in millions)	Current		Noncurrent		Current		Noncurrent
Balance at January 1, 2019	$	44	$	25	$	49	$	22
Revenue recognized included
in opening contract balance		(39)		(12)		(81)		(17)
Cash received, excluding amounts
recognized as revenue		-		-		78		16
Credits granted, excluding amounts
recognized as revenue		30		1		-		-
Reclassified between Current
and Noncurrent		5		(5)		-		-
Reclassified to held for sale		(3)		(1)		(5)		-
Balance at December 31, 2019	$	37	$	8	$	41	$	21

Short-term contract assets, Long-term contract assets, Short-term contract liabilities, and Long-term contract liabilities are included in other current assets, other assets, other current liabilities, and other liabilities, respectively, on our consolidated balance sheet.

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

	Revenue from remaining
($ in millions)	performance obligations
2021	$	1,426
2022		651
2023		288
2024		118
2025		69
Thereafter		139
Total	$	2,691